Story by Martin Durbin, U.S. Chamber of Commerce
Throughout our history, America has answered the call when the world needs us. Such a moment is once again upon us. With vast energy resources and technological know-how, our nation is uniquely positioned to meet the world’s growing demand for affordable, reliable energy. At the same time, we must remain focused on the urgent challenge of climate change by developing and deploying the technologies needed to reduce emissions and decarbonize our economy. Fortunately, we can accomplish both imperatives by leveraging the power of the U.S. business community in partnership with our government.
Understandably, most Americans do not pay attention to energy policy until prices start rising like they began doing last year. Russia’s invasion of Ukraine and the resulting tough sanctions imposed by the international community highlights the world’s dependence on reliable supplies of energy to support the entire global economy. Oil and natural gas are the primary sources of that energy, and the Department of Energy forecasts they will remain the most-consumed sources of energy in the U.S. through at least 2050. Just as greater use of natural gas enabled the U.S. to lead the world in the reduction of greenhouse gas emissions since 2005, we know it can do the same for developing economies as it avoids the use of higher emitting fuels.
Already the world’s leading producer of oil and natural gas, the U.S. can do even more to shore up our own energy security while providing critical supplies to our allies and partners around the world. This, however, requires deliberate long-term planning and a partnership between government and industry to ensure we have the necessary infrastructure and policies in place.
The Biden administration has taken welcome steps to acknowledge the need for more domestic oil and natural gas production. Energy Secretary Jennifer Granholm recently noted that we are “on war footing” and that increased LNG production will ensure that “others are not hurting,” which presents an opportunity for industry and the administration to identify a constructive path forward. That would send important signals to the market that investments in both energy production and infrastructure are encouraged and welcome. Moving beyond debunked arguments about unused leases and accusations of price gouging would also be helpful. Other steps the administration should take include the final approval of four LNG export applications awaiting action by DOE (which would help get more supplies to Europe), development of the legally required Five-Year Offshore Oil and Gas Leasing Program, moving expeditiously to conduct oil and gas lease sales, and permitting reforms to bolster our ability to deliver that energy to consumers.
The invasion of Ukraine also shows why we must remain committed to an ambitious energy transition – reducing greenhouse gas emissions as much as possible at the pace of innovation. This effort also requires deliberate long-term planning and a government/business partnership. Special Presidential Envoy for Climate John Kerry has pointed out that half of the technologies needed to address the global climate challenge are not yet commercially available or have yet to be invented. Whether in renewables, batteries, hydrogen, advanced nuclear, or carbon capture and removal, there is enormous opportunity to accelerate progress through investments in technology and innovation. With Congress having enacted the Energy Act of 2020 and the Bipartisan Infrastructure Law late last year providing well more than $100 billion in new investments, we have a strong foundation to build upon.
There remains even more work that can be done using the bipartisan spirit and framework that led to infrastructure investment. That includes investments in resilience and adaptation, technology neutral tax incentives, voluntary carbon offset markets, and increasing access to global markets for key climate projects.
While the U.S. has abundant production of oil and gas, the same cannot be said for the critical minerals that are needed for batteries and numerous other uses in in our economy. Therefore, the administration must get serious about establishing a domestic supply chain for critical minerals, which includes permitting mining projects necessary to help address the shortfall. Otherwise, our growing desire to electrify will result in a growing dependence on foreign imports of clean energy resources, including from nations that do not share our values.
This moment in time requires leadership, and it requires thinking about our energy policy not in terms of a binary choice between fossil fuel production and climate change mitigation but rather in the context of energy security and the energy transition. Escalating prices and the current global conflict underscore the urgency to do both, and we think our nation can rise to the challenge and meet our imperative.